OECD, UNDP to boost tax collection in developing countries

By Mutale Kapekele

A new initiative that will help developing countries like Zambia to bolster domestic revenues by strengthening their tax audit capacities has been launched by the Organization for Economic Cooperation and Development (OECD) and the United Nations Development Programme (UNDP).

The Tax Inspectors Without Borders (TIWB) project, which will help countries mobilize domestic revenue in support of the post-2015 Sustainable Development Agenda (SDGs), was announced on July 13 at the third International Conference on Financing for Development in Addis Ababa.

Debt redden Zambia is one of the beneficiaries of the TIWB, which will facilitate targeted tax audit assistance in developing countries worldwide. Tax audit experts will work alongside local officials of developing country tax administrations to help strengthen tax audit capacities, including issues concerning international tax matters.

A number of pilot projects and international tax workshops are already underway, including in Albania, Ghana and Senegal. Evidence gathered from real time cases in Colombia indicate a significant increase in tax revenue, from USD 3.3 million in 2011 to USD 33.2 million in 2014, thanks to tax audit advice and guidance.

“The challenges faced by developing countries are being acknowledged internationally and we are delighted to mobilize the best experts worldwide in a practical contribution to domestic resource mobilization,” OECD Secretary-General Angel Gurría said during a launch event in Addis Ababa. “The new partnership between the OECD and UNDP on Tax Inspectors Without Borders will significantly extend the global reach of existing efforts to build audit capacity while sending a strong message of international support to developing countries.”

And UNDP Administrator Helen Clark said "effective domestic resource mobilization is at the core of financing for sustainable development but efforts to raise domestic resources are often constrained by tax evasion and avoidance, and by illicit financial flows.”

Clark explained that the Tax Inspectors Without Borders programme is an “innovative and practical way of supporting developing countries to mobilize more domestic resources for development.” She added that with its country level presence and local knowledge, UNDP is well-placed to partner with the OECD and the best audit experts to scale-up this important work.

A dedicated central organizing unit, the TIWB Secretariat, supported by an oversight board of stakeholders, will operate as a clearing house to match the demand for auditing assistance with appropriate expertise. The Secretariat, composed of OECD and UNDP staff and based at the OECD in Paris, will facilitate full-time or periodic deployment of experts.

A TIWB Toolkit sets out guidelines for establishing TIWB programme and protecting against potential confidentiality and conflict of interest concerns.